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THE PROGRESS OF 
ECONOMIC POWER 
GENERATION AND 
DISTRIBUTION 


BY 

SAMUEL INSULL 


> 

■ 

AN ADDRESS DELIVERED AT A JOINT MEETING 
OF THE NEW HAVEN, CONN., SECTIONS OF THE 
CIVIL, ELECTRICAL, MINING AND MECHANICAL 
ENGINEERING SOCIETIES HELD AT YALE UNI¬ 
VERSITY UNDER THE AUSPICES OF THE NEW 
HAVEN SECTION OF THE AMERICAN SOCIETY 
OF MECHANICAL ENGINEERS ON APRIL 5, 1916 



.. 








THE PROGRESS OF 
ECONOMIC POWER 
GENERATION AND 
DISTRIBUTION 


BY 

SAMUEL INSULL 


AN ADDRESS DELIVERED AT A JOINT MEETING 
OF THE NEW HAVEN, CONN., SECTIONS OF THE 
CIVIL, ELECTRICAL, MINING AND MECHANICAL 
ENGINEERING SOCIETIES HELD AT YALE UNI¬ 
VERSITY UNDER THE AUSPICES OF THE NEW 
HAVEN SECTION OF THE AMERICAN SOCIETY 
OF MECHANICAL ENGINEERS ON APRIL 5, 1916 


CHICAGO 

1916 






Y 




Copyright, 1916, by Samuel Insull 



/ 

OCT 14 1916 

©CI.A445127 



POWER GENERATION AND DISTRIBUTION 


I can assure you that it affords me very great pleasure to 
have the opportunity of addressing a joint meeting of the civil, 
electrical, mechanical and mining engineers under the aus¬ 
pices of the local section of the American Society of Mechan¬ 
ical Engineers. 

I have thought it fitting on this occasion to deal at some 
length with the historical aspect of the generation and distri¬ 
bution of electrical energy, and I shall present to you this 
evening a series of pictures bearing upon that subject and trac¬ 
ing the growth of the industry from the point of view of the 
apparatus used. At the end of my remarks I shall deal with 
some of the economic problems in connection with the busi¬ 
ness. 

As I have to present quite a number of lantern slides, I 
will not burden you with a long explanation, but shall trust 
to dealing with the various aspects of the question as the 
pictures and diagrams pass before you. 

Birthplace of the Central-Station Industry. 

The view presented on page 5 (Fig. 1) is really the birthplace 
of the central-station industry. It is some thirty-five years 
ago the first of last month, having arrived only the day be¬ 
fore, the last day of February, 1881, from England, to act as 


NOTE.—This is a revised stenographic report of an address delivered by 
Mr. Samuel Insull, President of the Commonwealth Edison Company, of Chicago 
(Illinois), at a joint meeting of the New Haven (Connecticut) sections of the 
Civil, Electrical, Mining and Mechanical Engineering societies, held under the 
auspices of the New Haven Section of the American Society of Mechanical 
Engineers, at eight o’clock P. M. on April 5, 1916, in North Sheffield Hall, 
Sheffield Scientific School, Yale University. Dr. Arthur Twining Hadley, Presi¬ 
dent of Yale University, welcomed Mr. Insull and introduced him to the audience. 



4 


POWER GENERATION AND DISTRIBUTION 


Mr. Edison’s private secretary, that I had the opportunity of 
seeing in operation the first central station and distribution 
system ever erected anywhere in the world. I had come to 
this country from an atmosphere of doubt; in fact, more 
than doubt—of derision—of the accomplishments of the great 
jnventor in electric power production and distribution; and 
when it was my privilege first to see in operation the first 
generating station and distribution system, Menlo Park pre¬ 
sented exactly the appearance that it presents in the picture. 
We had had a late winter, and I had never seen any such 
amount of snow. As I trudged around the countryside and 
saw the small electric glow lamps burning over an area of 
about half a mile square, it seemed almost impossible to real¬ 
ize that what was popularly called at that time the “subdi¬ 
vision” of electric current had been achieved by Mr. Edison. 

One building contained the generating station. The con¬ 
ductors—this was prior to the days of the three-wire sys¬ 
tem—the conductors were composed of two lines laid un¬ 
derground in tubes filled with a compound composed of in¬ 
sulating material. 

All the buildings of Mr. Edison’s experimental establish¬ 
ment are not shown in the view here. The lamp factory, 
for instance—the first incandescent-lamp factory which Mr. 
Edison erected—was half a mile away. A portion of the 
lamp factory was operated by an electric motor, the energy 
being supplied from the experimental station erected in Mr. 
Edison’s laboratory. The central-station electric-lighting sys¬ 
tem of early days was uneconomical from our point of view, 
as the energy per candlepower was between six and eight 
times as much as the energy now used. But from an engineer¬ 
ing point of view, with the exception of the greater efficiency 
of the translating devices as now used, and the greater econ¬ 
omy of investment of the distribution system, the system in¬ 
stalled by Mr. Edison in the winter of 1880, and seen by 
me on the first of March, 1881, was in all respects identi¬ 
cal with the system that is employed today throughout the 
world. 


POWER GENERATION AND DISTRIBUTION 


y 



Fig. 1. Edison Laboratory at Menlo Park, Winter of 1880 







(•> 


POWER GENERATION AND DISTRIBUTION 


Early Incandescent Lamps and Dynamos. 

Fig. 2 gives you an idea of the lamp as originally made. 
That lamp took about six or eight watts per candle, possibly 
ten watts per candle. The filament was carbonized bam¬ 
boo filament, which then seemed to be the best substance 
obtainable for the purpose. It is interesting to note in pass¬ 
ing that that bamboo carbonized filament was used after a 




Fig. 2 Fig. 3 

Early Edison Incandescent Lamp Old Edison Dynamo 

series of experiments on metallic filaments which proved more 
or less of a failure at that time. Platinum and other metals 
were used; and if you will refer to some of Mr. Edison’s 
early patents on incandescent lamps, I think you will find that 
he mentioned the possible use of tungsten in connection with 
the making of filaments for incandescent lamps. 

That (Fig. 3) is the typical generating machine of those 
days. Those of you who have been in the industry since the 
early days will recognize it as the machine which was 
commonly called the “Z" machine. The first machine of 
that general character—I won't attempt to go this evening 
into any- technical descriptions of this or any of the other 





















POWER GENERATION AND DISTRIBUTION 


apparatus represented—but the first one of that character 
was installed in the Jeannette, which sailed on the 8th of 
July, 1879, for the Arctic. The Jeannette, formerly the 
Pandora, was sent by James Gordon Bennett of the New York 
Herald on a voyage of discovery to the North Pole, and the 
first machine that Mr. Edison supplied for any purpose out¬ 
side of his laboratory was the machine which he supplied 
for use on the Jeannette. 

Commercial Plants on Sea and Land. 

The first commercial plant installed, the same class of 
machine being used, was installed in the steamship Columbia, 
a passenger boat built by John Roach for the Northern Pa¬ 
cific Railroad, or one of its predecessors, and which ran 
for years between San Francisco and Portland, Oregon. The 
plant installed in 1880 was in operation until a comparatively 
few years ago. 

The same class of machine was installed by Mr. Edison 
and his associates for the first time on land in a plant sup¬ 
plied to Hinds, Ketcham & Company, of New York, in Jan¬ 
uary, 1881, and it is interesting to note that the first lamp 
factory, to which I have already referred, was operated for 



Fig. 4 . Edison’s Steam Dynamo of 1880 








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POWER GENERATION AND DISTRIBUTION 


some time by a motor of similar construction but smaller size 
than the machine illustrated. 

Probably the first direct-connected unit ever built is the 
one illustrated by Fig. 4. The engine was designed by Mr. 
Charles T. Porter, the noted steam engineer. The dynamo was 
made under specifications supplied by Mr. Edison, and I 
think the capacity of the machine was probably about thirty 
or forty kilowatts. It was built to run at a speed of 600 
revolutions a minute, but the speed was found to be too high 
for safe and economical operation. The machine was purely 
an experimental machine and was used only at Menlo Park 
in the laboratory, and the use of the machine was discontin¬ 
ued in 1881. 

Pearl Street and Appleton Stations. 

The next view (Fig. 5) is that of the first commercial di¬ 
rect-connected unit, which was originally ordered for use in 
the old Pearl Street station of the Edison Electric Illumin¬ 
ating Company of New York, a station which was erected on 
Pearl Street just south of Fulton Street, in what is known 
in New York as “The Swamp.” It is interesting to note that 
the fundamental engineering principles followed by the great 
inventor himself in his early engineering work, while for one 
reason or another they were temporarily discarded, finally 
again in the last twenty years have come into their own; and 
there are few of us today who would think of ordering any¬ 
thing but a direct-connected unit. 

This particular machine had connected to it an Armington 
& Sims engine made by that firm in Providence, Rhode Island, 
and was shown at the Paris Electrical Exposition in the fall 
of 1881, and was considered there a marvel of perfect elec¬ 
trical and mechanical construction. 

Two other machines of the same general design and make 
were shipped to London and installed in Holborn Viaduct 
Station, which was the first central station in the world 
supplying electricity on a commercial basis. It was first oper¬ 
ated on April 11, 1882, but was subsequently abandoned. 


POWER GENERATION AND DISTRIBUTION 


9 



Fig. 5. Edison Jumbo Steam Dynamo No. 1 (1881) 



10 


POWER GENERATION AND DISTRIBUTION 


It is rather a long cry from the center of the greatest 
metropolis of the world to the lumber regions of Wiscon¬ 
sin, but so far as this country is concerned (and I think so 
far as any country is concerned), Appleton, Wisconsin, can 
claim the credit of starting the first central station whose 
distribution system—not whose original station—but whose dis¬ 
tribution system—has been continuously operated since August 
15, 1882. An exterior view of the original Appleton Edison 
station is given in Fig. 6. It was an accident that the Apple- 
ton, Wisconsin, station should have been started earlier than 
the first large station in New York, owing to the fact, as you 
will see by an inspection of Fig. 7, that it took the Appleton 
company only a short time to install the equipment, the station 
being very small. 

The generator shown in Fig. 7 is a slightly different ma¬ 
chine on the same general lines as the one already shown, 
but with three sets of magnets—called, I think, the “K” ma¬ 
chine—simply three of the “Z” machines put together and 
called the “K” machine. Otherwise the machine is exactly 
the same as the original “Z” machine at Menlo Park. This “K” 
machine had a capacity, I think, of 280 lights of ten candle- 
power each. The dynamo-electric machine, though small, was 
robust, for under all the varying speeds of water-power, and 
the vicissitudes of the plant to which it belonged, it continued 
in active use until 1889, when it was superseded by later 
apparatus. 

Early Plants That Paid. 

The view in Fig. 8 is not a very good one, as it is a 
photograph of a model of the historic Edison station at Pearl 
Street, New York. The regulating room was at the top. 
This station was put into service on September 4, 1882. The 
original equipment consisted of six Porter engines of 125 
horse-power each. These were subsequently replaced by Arm- 
ington & Sims engines. The six dynamos were of the Edison 
Jumbo type and were direct-connected, showing Mr. Edi¬ 
son’s conception that what was necessary for central-station 


POWER GENERATION AND DISTRIBUTION 


11 



Fig. 6. Exterior of Edison Station in Appleton, Wis. (1882) 



Fig. 7. Interior of Edison Station in Appleton, Wis. (1882) 













































































12 


POWER GENERATION AND DISTRIBUTION 



work was dynamo-electric machines directly connected to the 
shaft of the engine. I think the two plants—Appleton, Wis¬ 
consin, and Pearl Street, New York—and probably a third 
plant erected at Milan in Northern Italy—are very remark¬ 
able tributes to the fundamental economic possibilities of the 
business of generating and distributing electrical energy. 

Fig. 9 shows the plant at Milan in Northern Italy. It was 
the one with which my friend, Mr. John W. Lieb, vice-presi- 


Fig. 8 . Model of Original Edison Station on Pearl Street, New York ( 1882 ) 






POWER GENERATION AND DISTRIBUTION 


13 



Fig. 9. Edison Central Station of Milan, Italy (1883) 



Fig. 10. Original Edison Building in Chicago 




















14 


POWER GENERATION AND DISTRIBUTION 


dent of the New York Edison Company, was associated in 
its early days. The plant in Milan and the plant in New York 
were of similar construction; and the point that I wish to 
draw to your attention particularly at this time is that these 
two plants, large in their day—seeming ridiculously small at 
this time, but large, very large, in their day—and the little 
plant at Appleton, Wisconsin, all of them showed in a very 
short time a substantial return on the original cash invest¬ 
ment made by the original capitalists who had the courage 
and the enterprise to put their money into a new industry. 

It is very seldom that original apparatus and original capital 
have shown a return to the investor in any great new departure 
in industrial affairs. Take the kindred industry, the gas busi¬ 
ness. I think that gas had been introduced twenty-four years 
before any return on the capital invested was shown. But in 
the early days of the electric-lighting business it was only about 
two to three years before the balance sheet of the enterprise 
was in such condition as to recommend it to men of capital. 

Central-Station Beginnings in Chicago. 

From now on I will probably present more views bearing 
on the enterprise that my name is particularly associated 
with, namely, the Chicago enterprise; and my excuse for 
doing so is that I am naturally more familiar with the work 
there than with any other enterprises. The first Edison plant 
in Chicago was located at 120 West Adams Street (originally 
139 Adams Street), in the building represented by Fig. 10. 
It was first started in 1888 and was shut down permanently 
in 1894, a few years after I became connected with the Chi¬ 
cago company. The original equipment consisted of four 200 
horse-power Armington & Sims engines, each driving two No. 
32 Edison bipolar generators with a capacity of 80 kilowatts 
each. 

Fig. 11 shows you a view of the engine room. We had 
discarded the use of the direct-connected units in the early 
eighties. We found, in the then condition of the steam¬ 
engineering art, that we could install plants cheaper with 


POWER GENERATION AND DISTRIBUTION 


15 



Fig. 11. Engine Room in Original Edison Station, Chicago 



Fig. 12. Dynamo Room in Original Edison Station, Chicago 



















1G 


POWER GENERATION AND DISTRIBUTION 


high-speed engines, some single-cylinder engines, but some 
of them compounds, belted to dynamos. Fig. 12 is a view of 
the original dynamo room in Adams Street, Chicago, just above 
the engine room, the belts running through the floor. 

The original three-wire switchboard installed at the Adams 
Street station in 1887 is illustrated in Fig. 13. The neutral 



Fig. 13 . Original Three-Wire Switchboard in Edison Station 
in Chicago 

cables were brought in from the street along the floor to 
small neutral bus-bars. The two large bars shown are the 
positive and negative busses. 

Importance of the Three-Wire System. 

Naturally a man of my environment and electrical education 
would say that the discovery of the three-wire system was 
made by Mr. Edison; others would probably give the credit 
to Werner von Siemens, and still others would probably give 
the credit to Dr. John Hopkinson. But I think the economic 
value of the three-wire system was really discovered by Mr. 
Edison. The various claims as to the amount of copper 
that would be saved over a two-wire system were estimated 
at various percentages, and I think the one more nearly cor- 






POWER GENERATION AND DISTRIBUTION 


17 


rect was the claim of Mr. Edison, who, my recollection is, 
thought that the saving would be somewhere between sixty- 
five and seventy per cent. 

The invention of the three-wire system of distribution 
made possible the extension of incandescent light and power 
from direct current over much wider areas than we had been 
used to installing in the days of the two-wire system, and 
probably the real growth of the business dates from that par¬ 
ticular invention. 

Harrison Street Station, Chicago. 

I am now going to jump to a very different class of 
apparatus, and I give you (Fig. 14) an exterior view of the 
Harrison Street station of the old Chicago Edison Company. 
It. was first operated in 1894 with a capacity of 2,400 kilowatts. 
Its maximum capacity was 16,200 kilowatts, and in its day 
was considered a very large station. This plant, which in its 



Fig. 14 . Harrison Street Station, Chicago 




18 


POWER GENERATION AND DISTRIBUTION 


day was considered so large, was considered obsolete last 
year and was sold, the property to be used as part of the 
new terminal of the railroads entering the Union Depot. The 
kilowatt-hours developed during the life of the plant—that is, 
from the time it started in 1894 until it last was operated 
early last year, early in 1915—the kilowatt-hours developed 
amounted to 534,783,000—less than one-half of the total 
output of the company for the year 1915. 

I have some affection for that old building, as it is the 
first plant that I built after leaving the manufacturing side 
of the electrical business and joining the business of manu¬ 
facturing electrical energy. I am sorry to see the old plant 
torn down. It is a milestone, so to speak, as it marks my 
entry into manufacturing kilowatt-hours instead of electrical 
apparatus. But the exigencies of the steam-railroad trans¬ 
portation business made it necessary to demolish the sta¬ 
tion. A great number of the experiments that have led up 
to the modern systems of generation and distribution were 
conducted in the Harrison Street station, as you will see from 
some of the pictures that I shall show. 

Marine-Tvpe Generating Units. 

A general interior view of the plant at Harrison Street is 
shown in Fig. 15. Two engines here were the first two large 
marine-type vertical engines connected to electric generators 
built in this country. A few smaller sizes had previously 
been built. Prior to our starting the building of this class 
of engines, a German company had built some marine- 
type engines for the Berliner Elektricitats-Werke. The first 
dynamos for the Berliner Elektricitats-Werke were built by 
Siemens & Halske, and the engines probably by one of the 
steamship builders on the German coast. My principal 
assistant at Schenectady (now the General Electric Company’s 
works at Schenectady) was at that time the late Mr. John 
Kruesi. He returned from a trip to Europe bringing with 
him the plans of the marine-type vertical engines then being 
built and having connected with them large dynamos on the 


POWER GENERATION AND DISTRIBUTION 


19 



Fig. 15. Interior of Harrison Street Station, Chicago 



Fig. 16. First Rotary Converters, Twenty-seventh Street Station 

Chicago 







20 


POWER GENERATION AND DISTRIBUTION 


same shaft, in some cases one at each end and in some cases 
only at one end. I endeavored to get the engine builders of the 
United States to discard high-speed engines and build slower 
speed marine engines of greater economy for electrical pur¬ 
poses. They were getting a good deal of money out of build¬ 
ing high-speed coal consumers, and they were very averse to 
making the change. In order to force the hands of the manu- 
facters we were compelled to build engines ourselves at 
Schenectady. One was built for the old Cincinnati Edison 
Company and never used by them, and the other was finished 
and installed at the World’s Fair in Chicago in 1893. The 
Chicago Edison Company, of which I was then president, 
and which had then just started to build this Harrison Street 
property, purchased the two units from the General Electric 
Company. The engines at the back, as shown in Fig. 15, 
were two large Corliss engines, built later by the Allis Com¬ 
pany of Milwaukee, from designs made by the head of their 
engineering department, Mr. Reynolds. 

The Change to Alternating Current, with Substations. 

Except for a small suburban station, of which I will show 
you a view later, the Harrison Street station was the last direct- 
current station built in the city of Chicago; in fact, a portion of 
the apparatus which I will show you later, one of the large 
Corliss engines, turned out both direct and alternating current. 

Particularly interesting is this view (Fig. 16), which rep¬ 
resents our first rotary converters. We put them into use 
at our Twenty-seventh Street station on October 15, 1897. We 
had a small steam station there, and turned it into a combina¬ 
tion station in 1897. These pieces of apparatus are interest¬ 
ing not only to the Commonwealth Edison Company but to 
the industry as a whole, as I believe they represent the first at¬ 
tempts in this country at massing the production of energy 
where it could be manufactured cheaply in large quantities, and 
its distribution made to distant points where the electricity could 
be converted to whatever pressure was necessary to enable 
it to be used in house-to-house service. The first rotary con- 


POWER GENERATION AND DISTRIBUTION 


21 



verters used in connection with an Edison central station 
anywhere were started by the Brooklyn Edison Company and 
the Chicago Edison Company in October, 1897, and I believe 
the engineers of the two companies are still disputing as to 
the claim of priority of use. 

The small machine that you see in the foreground in Fig. 
17 was ordered as a double-current, belt-driven generator 


Fig. 17. First Rotary-Converter Installation at Harrison Street 

Station, Chicago 


























22 POWER GENERATION AND DISTRIBUTION 

and was to have been installed in one of our smaller steam 
stations in Chicago, but by the time the machine was com¬ 
pleted it was decided to install it in our Harrison Street sta¬ 
tion, as an “inverted rotary” to supply alternating-current 
energy to the rotary converters shown in Fig. 16. The 


Fig. 18. First Double-Current Generating Units, 
Harrison Street Station, Chicago 

initial voltage of this machine was 2,250 volts, and this was 
raised the next year to 4,500 volts, which was considered at 
that time to be very high voltage indeed to carry alternating 
current over underground cable. In 1900 the voltage was 
raised to 9,000, the same cables being used. 




POWER GENERATION AND DISTRIBUTION 


Cables and Machinery. 

It is rather a tribute to the early manufacturer of cables 
for high voltage that such increases in voltage were made sim¬ 
ply on the assurance of the cable manufacturer* who happened 
to dine with me here this evening. I believe the cable is still 
in use. 

The dynamos attached to the engine shown in Fig. 18 were 
originally direct-current machines. They were replaced in 



Fig. 19. Rotary Converter 11000 Kilowatts) in Substation 


1898 by two 200-kilowatt double-current machines. That is, 
the machines were so designed that the output could be taken 
either in the form of direct current or 25-cycle alternating 
current. 

While it may seem a very simple matter to manufacture 
machines of that character today, at the time these ma¬ 
chines were put into service in 1898 it was thought to be a 
very extraordinary achievement. 

Fig. 19 shows, in the foreground, a 1,000-kilowatt light- 
and-power rotary converter in the Indiana Street substation, 

^Referring to Mr. George J. Jackson, of New York, secretary and treasurer 
of the National Conduit and Cable Company.. 






24 


POWER GENERATION AND DISTRIBUTION 




Fig. 20. Rotary Converter of 4000 Kilowatts 


Fig. 21. View in Fifty-Sixth Street Station, Chicago 


















POWER GENERATION AND DISTRIBUTION 


25 


Chicago, which supplies current for light and general power 
purposes. At the present time the substation has a capacity of 
three 1,000-kilowatt rotary converters. 

Next (Fig. 20) is a 4,000-kilowatt railway rotary. There 
are three 4,000-kilowatt rotaries at this substation, which is 
the Hermitage Avenue substation. This substation was built 
to shut down the Loomis Street steam plant of the Metropoli¬ 
tan West Side Elevated Railway. 

Steps in the Path of Progress. 



Now we go back to a small steam generating station. The 
plant shown in Fig. 21 was built and put in operation in 1899 
to supply the south end of the city (varying from seven to 
seventeen miles from the center of the city) with 60-cycle 
energy. Previous to the introduction of the large steam tur- 


thought that cus¬ 
tomers away from 
the center of the 
city could best be 
s u p plied from 
steam plants in the 
district within a 
distribution range 
of three-mile ra¬ 
dius. This station 
had a capacity of 
3,000 k i 1 o w a tts, 
and since 1906 has 
been used only as a 
peak reserve sta¬ 
tion for winter use. 

A f requency 
changer of 1,000 
kilowatts in our 
Lake View substa¬ 
tion is shown in 


Fig. 22. Frequency Changer 
(1000 Kilowatts) 




26 


POWER GENERATION AND DISTRIBUTION 



Fig. 22. This was the next step in supplying the 60-cycle load 
from large generating centers, and, by transmission and con¬ 
version, furnishing the energy in the form required in the dis¬ 
trict in which it was used. The energy was generated and de¬ 
livered to the machine at 25 cycles and converted to 60 cycles 
before being sent out on the lines. 

The view in Fig. 23 is of a step-down transformer. In 
1910 the 60-cycle load had grown to such proportions that 


Fig. 23'. Step-down Transformers in Substation 

in order to produce this energy at the lowest possible cost 
it became necessary to generate at 60 cycles in the big gen¬ 
erating stations, the only conversion being a step-down in 
voltage at the substation, as shown here. 

Great Modern Generating Stations. 

Fig. 24 gives an outside view of the Fisk and Quarry Street 
stations on the Chicago River. The large building in the 
center of the picture is the Fisk Street station, and the building 
on the left is the Quarry Street station. The Fisk Street 
station was the first large steam-turbine station ever erected. 
Turbines of a few thousand kilowatts had been put into use 
by Parsons of England and Brown, Boveri & Co. of Switzer- 











POWER GENERATION AND DISTRIBUTION 


27 


land, and one or two German 
manufacturers; but this was 
the first station built for steam 
turbines alone, and I think it 
was the first station built by 
an Edison company using 
alternating current as the basis 
of its generation. 

The capacity of the Fisk 
Street station is 165,000 kilo¬ 
watts, or 247,000 horse-power, 
and of the Quarry Street sta¬ 
tion is 84,000 kilowatts, or 
126,000 horse-power. They 
are both run as one, under one 
organization, and together 
have a capacity of 249,000 
kilowatts or 373,000 horse¬ 
power. I presume that some¬ 
time in the next few years 
those two stations will repre¬ 
sent a total of about 500,000 
horse-power. 

To show the magnitude on 
which the business is con¬ 
ducted these stations have 
been run at the highest pos¬ 
sible load factor because the 
apparatus there, up to a short 
time ago, was the most eco¬ 
nomical that we had, 3,277,300 
kilowatt-hours being generated 
in the combined plants in one 
day. That was on the 24th of 
December of last year. In 
the year 1915 the two plants 
generated 961,818,000 kilo¬ 
watt-hours, and the total en- 



Fig. 24. Quarry Street and Fisk Street Generating Stations, Chicago 











28 


POWER GENERATION AND DISTRIBUTION 


er gy generated to date by those two plants amounts to 5,814,- 
162,000 kilowatt-hours. These figures will give you some idea 
of the enormous production that electrical energy has achieved 
in the larger cities of the country. 

Generating Units of Fisk Street Station. 

The view presented in Fig. 25 is a view of the first 
machines that were installed there, so far as their appearance 
is concerned. At the time we started to build the Fisk Street 
station we first ordered from the General Electric Company 
one 5,000-kilowatt machine. We had expected to put in four¬ 
teen machines—say 70,000 kilowatts. We were rather im¬ 
pressed with the Curtis turbine as developed by the General 
Electric Company. They had an experimental machine of 
some 250 or 500 kilowatts, and my friend Mr. Coffin, the 
president of the company, wanted me to give them an order 
for a machine capable of developing 1,000 kilowatts. I told 
him that we already had a large number of reciprocating- 
engine units much larger, and to go to a machine of a smaller 
size simply because it was novel would be a step backward. 
He finally agreed to take the risk of building a 5,000-kilowatt 
machine if I would take the risk of installing it, the under¬ 
standing being that if it would not work we were to return it, 
we to be out the cost of installation and the loss to our busi¬ 
ness and the General Electric Company to stand the cost of 
the turbine. 

It is rather interesting to note here in New Haven that at 
that time Professor Breckinridge, who was then the head of 
the engineering department of our state university (Illinois), 
assisted us in testing the first units at the Fisk Street station. 
We put in three units. The first one ran as high as 7,800 kilo¬ 
watts, and the other two about the same—not because they 
were intended by the manufacturer to develop that amount of 
power, but because the necessities of our business compelled 
us to get all the power out of them that we could generate. 
Then we installed a fourth machine of larger capacity, of about 


POWER GENERATION AND DISTRIBUTION 


29 



9,000 kilowatts, and paid a premium because the machine 
exceeded the guarantee. 

None of those four machines is shown in Fig. 25. The 
progress of the art was such that with practically the same 
boiler-room arrangements, a little larger grates, and a little 
higher stacks, we were able to operate 12,000-kilowatt units, 
so we scrapped the first four machines and installed 12,000- 


Fig. 25 . Turbo-Generators in Fisk Street Station, Chicago 









POWER GENERATION AND DISTRIBUTION 


30 


kilowatt units in their place. The view given is that of the 
later machines. I think that scrapping operation cost us up¬ 
ward of a million dollars, and I think it paid for itself in 
about three years owing to the advances made in turbine 
design. 

Let the Shoemaker Stick to His Last. 

It is rather interesting to note the difference in method 
of people who run the business of the manufacture of electrical 



Fig. 26. Boilers in Northwest Station, Chicago 


energy as a business and the method pursued by people who 
run the manufacture of electrical energy as a side-show. One 
of the most up-to-date steam-railroad systems in the United 
.States today* is probably the New York Central line. I think 
they have two stations equipped with precisely the same kind 
of apparatus as that which we discarded several years ago. 

What is the reason for that? Their business is to manu- 







POWER GENERATION AND DISTRIBUTION 


31 



Fig. 27 . Turbo-Generator ( 30,000 Kilowatts) in Northwest Station, Chicago 










32 


POWER GENERATION AND DISTRIBUTION 


facture transportation. They might just as well be in the 
business of manufacturing coal as to manufacture electrical 
energy. It is a mere side-show with them. True, it has given 
them less trouble than anything else, but, so to speak, they 
are letting the water flow over the dam day after day in 
their electrical apparatus, because it is not their business to 
get highly efficient results in generating electrical energy. 

The way railroad men make their balance sheet show up 
well is by finding out how to manufacture cheap transporta¬ 
tion, whether of dead freight or live freight, and the way we 
central-station men make our money is by manufacturing cheap 
energy. I do not know of any better illustration, or any better 
case where we can (if may he allowed to use slang) “hand 
one” to the steam-railroad company and quote the old adage 
that “a shoemaker had better stick to his last.” 

Several years ago there came out to Chicago a very dis¬ 
tinguished engineering commission for the purpose of gather¬ 
ing information to be used in designing a large plant. This 
commission decided to duplicate what we had-—not what we 
have—but what we had. And for fear they would not be able 
to run it they purloined one of our men to run it, and they 
are still running it. What they copied has been in the 
scrap heap for years. I think one of the machines which 
they copied is erected in the yard of the General Electric Com¬ 
pany at Schenectady as a sort of relic of ancient history. 

Running Into Large Figures. 

Fig. 26 is a view of one side of the boiler-room of one of 
our stations. If we had a complete view of the room you 
would see that the chutes carrying coal down on each side 
give quite a Gothic appearance to the room. The number 
of boilers is five. The heating surface for each boiler is 
12,200 square feet; superheat, 200 degrees Fahrenheit; steam 
pressure, 250 pounds per square inch; capacity in pounds of 
steam per hour for each boiler, 50,000 pounds. For all five 
boilers 60,000 pounds of coal an hour is required. 

A view of a turbo-generator erected in the Northwest sta- 


POWER GENERATION AND DISTRIBUTION 


33 


tion, Chicago, is given in 
Fig. 27. It is of 25-cycle, 
9,000-volt, 30,000-kilowatt 
capacity; total weight, 590 
tons; length over all, 60 
feet; width, 19 feet; revolu¬ 
tions per minute, 1,500; 
peripheral speed of revolv¬ 
ing field in feet per minute, 
20,000. That class of ap¬ 
paratus has taken the place 
of the vertical turbine 
shown in previous views. 

Our practice is to run a 
machine of that character 
practically all the time. We 
get the best results and the 
lowest repair costs if it runs 
continuously, provided it is 
shut down a few hours a 
week to see that everything 
is in order. It is a class of 
machine which is being very 
largely used at this time and 
represents the most modern 
development. 

The diagram of Fig. 28 
represents the capacity of 
generating units at various 
dates, and gives some idea 
of the progress in the mass¬ 
ing of production of energy. 
In 1887, 160 kilowatts; 

1902, 3,500 kilowatts ; 1903, 
5,000 kilowatts; 1915, 35,- 
000 kilowatts. That repre¬ 
sents the progress that has 
been made. If there had 






Z 

o 


* 

<S) 


Z 


o 


$ sn 




o 
c£ 


Fig. 28 . Relative Sizes and Ratings of Generating Units in Chicago 


















































POWER GENERATION AND DISTRIBUTION 


::4 


been room on the lantern slide, we could have started out with 
the first direct-connected unit of 1881 of about 50 kilowatts. 
1 shall come back to this subject later. 

Taking Advantage of Diversity of Demand. 

A load diagram of the maximum day of the winter of 
1915-1916 is given in Fig. 29. It shows the relative amounts 
of electrical energy supplied to street and elevated railways 
and for light and general power purposes in the city of 
Chicago. The light and power business took 147,300 kilo- 



Fig. 29. Load Diagram of Maximum Day, Winter of 1915-1916, 

Chicago 








































































































































































































































































































































































POWER GENERATION AND DISTRIBUTION 





Fig. 30. Comparative Load Diagrams for Maximum Day 

watts on the 29th of November, 1915, which was the clay of 
the coincident maxima data. The railways took 190,600 
kilowatts on the same day, a total for both of 337,900 kilo¬ 
watts. The non-coincident maxima for that winter came on 
the 22nd of December, 1915, in the light and power business 
when that business took 155,670 kilowatts. I he date of non¬ 
coincident maximum of the railway business came on Janu¬ 
ary 6, 1916, when that business took 203,560 kilowatts. So 
that we took care of the non-coincident maxima of the two 
branches of our business (3o9,230 kilowatts) with a total for 
the coincident maxima of 337,900 kilowatts. Ibis shows a 
diversity of 21,330 kilowatts. As I shall show you later on, 
one of the tendencies of the massing of production is to in¬ 
crease the diversity. 

The drawing shown in Fig. 30 is the load diagram for the 
maximum day and shows the Chicago curve for 1894 and 
one for a large city without the railway load prorated to the 
'Chicago 1915 maximum curve for comparison. 1 he annual 














































POWER GENERATION AND DISTRIBUTION 


:!0 


load factor for Chicago in 1915 was greater than that of 
Chicago for 1894 by 68.5 per cent, and was greater than 
that of the large city in 1915, without the railway load, by 
23 per cent. 

I think on this load diagram you can find pretty good proof 
of the desirability of massing production and distribution. In 
1894 the Chicago business showed a 25 per cent load factor. 
An eastern city having a great many advantages in the light 
and power business which we do not possess in Chicago 
showed a 35 per cent load factor in 1915. Chicago, doing a 
wholesale and retail business combined, in 1915 showed a 43 
per cent load factor. A reference to the diagram shows where 
the increase comes in. 

Fig. 31 gives you a comparison of the summer and winter 
business of the energy supply to street and elevated railways. 
It shows that the winter demand is 35 per cent greater than 
that of the summer. 

Usefulness of Alternating Current. 

Before I go to some of my further curves, which are of a 
financial character, I would like to draw a few lessons from 
the lantern slides that I have presented to you. In the early 
days of this business of producing and distributing electrical 
energy, we were confined to very small areas—probably about 
2,500 feet in any direction from the generating plant. Unless 
we used expensive apparatus, such as boosters and very large 
feeders requiring a very heavy investment, it was difficult to 
get a direct-current system beyond 2,500 feet in any direction, 
or say about a mile square. 

Then the alternating-current system came along, and that 
did not fill the bill. There were disadvantages in the early 
apparatus. Owing to the smallness of the units, the cost of 
production was very high. We had made greater advances 
really in the steam engineering and in the electrical engineer¬ 
ing of the direct-current system than was made for a num¬ 
ber of years by the alternating-current people. We people who 
had been very much wedded to direct-current production and 


POWER GENERATION AND DISTRIBUTION 


37 


distribution were casting around for means of economic trans¬ 
mission. 

We were forced to the use of alternating-current feeders 
by the development of the marine-type of engines with direct- 
connected dynamos, leading to the building of units running 
up to three and four and five thousand kilowatts. We were 
forced to take advantage of this system of transmisison, many 
of us very unwillingly, because we at that time had great 
prejudices against the alternating-current system. We used 



to give it the name which is used with reference to some of the 
apparatus now used in the war, that is, “baby killer.” And 
some of us used to point to the practice in several of the 
states of “electrocuting” criminals by the alternating current 
to show what a terrible thing the alternating current was. 
But as steam engineering progressed, as we got more econom¬ 
ical units, we were forced to use the alternating-current sys¬ 
tem for generating and transmission purposes. 

Improvements in the Apparatus. 

The apparatus was very uneconomical at the start. Some 
of us used rotary converters, some of us used motor-gener- 





















































38 


POWER GENERATION AND DISTRIBUTION 


ators, but they were nearly all of them uneconomical at the 
start. The improvements in both classes of apparatus led to 
a very great extension of the use of the alternating current. 
But the thing above everything else that has led to the mass¬ 
ing of production of energy for all purposes is the introduc¬ 
tion of the large steam turbine. With the reciprocating en¬ 
gine we could not get much above 4,000 or 5,000 horse-power. 
There may have been a few units made of 5,000 kilowatts, but 
very few indeed. 

But when the large steam turbine was produced, with its 
great economy, both in its cost of installation and cost of oper¬ 
ation, we were forced still further to take advantage of 
alternating-current generation and alternating-current primary 
distribution, so that today no one thinks of building a direct- 
current station for use where any large amount of energy 
is required over any extended area. 

I think, next to the invention of the original direct-current 
distribution system and the original invention of the alternating- 
current system, that probably the thing that has had the great¬ 
est influence on the development of this great industry, which 
today is becoming not only state-wide but almost nation-wide 
in its character, is the development of the large steam turbine. 

A Note of Warning as to Size of Units. 

Probably there is no better time than this to sound a note of 
warning to those who are carrying the development of prime 
movers to very large sizes. To those of you who are familiar 
with the course that I have pursued myself in connection with 
the development of the enterprises under my control, it may 
seem rather unusual for me to sound a word of caution on 
size. But it does look to me as though a great many of the 
managers of the systems in different parts of the country are 
allowing their engineers to order turbines of a size out of all 
proportion to their requirements, and having no relation to the 
load which they have to deal with, and that if such a course is 
unwarrantably pursued it must inevitably lead to disaster in 
some of the great distribution systems of this country. 


POWER GENERATION AND DISTRIBUTION 


39 


I heard the other day of a man who is installing a large 
turbine for more than fifty per cent of his load. There is 
absolutely no justification for such a course. I do not myself 
think that it is safe to order a unit for much more than say 
ten to twelve—and at the very extreme fifteen—per cent of the 
total demand on any one system. There are cases where it 
is not possible to confine one’s self to that percentage; for in¬ 
stance, where turbines for new systems are being ordered. But 
I refer to cases where old systems are in existence, and there 
is not any justification for the very large turbines; and I would 
make the suggestion, particularly at this time when the 
cost of material is so great and when it is impossible to get 
the views of the best people on both sides of the Atlantic, 
that the operators of large systems would do well to call a 
halt in building larger sizes of turbines. 

At the present time about 35,000 to 40,000 kilowatts is the 
largest size that can be obtained. I have heard of some orders 
being given for 50,000-kilowatt machines. I am rather sorry 
to hear it because I think the buyers will regret it. Before 
we need the larger size we will need higher boiler pressure, 
which will first require expensive experiments in boiler con¬ 
struction, and we will need a great many changes in the details 
of apparatus used in connection with large turbine units; and 
I think that the progress of the next few years will be the 
better made if it is the slower made. 

I am sure that if those who are connected with any large sys¬ 
tem will follow up my suggestions as to the desirability of 
standing still a little while they will find that in the course of 
the next few years they will be a great deal of money in 
pocket. I am giving this form to my views on the subject 
because I am generally credited with employing the largest 
apparatus that can be obtained. 

The Engineering of Selling. 

Having true engineering of construction as a basis, we come 
to another side of the business; that is, the engineering of 
selling. 


40 


POWER GENERATION AND DISTRIBUTION 


This diagram (Fig. 32) shows that, starting in 1896 with a 
gross business in Chicago of about $1,000,000, and increasing, 
year by year, we had in 1915 a total business of almost 
$21,000,000, divided as follows: Light, a little over $11,000,- 
000; power, a little over $5,000,000; and the supply of energy 
for transportation purposes, a little below $5,000,000. 



Fig. 32. Increase of Earnings and Decrease of Rates 

I will have to pass over the rest of my charts quickly, because 
1 have already talked beyond the time allotted to me. 

Fig. 33 is a chart of kilowatt-hours produced and sold. It 
is interesting to note how closely the output figures follow the 
figures of money. You will notice that the curves on this 
drawing follow very closely the curves on the previous one 























































































POWER GENERATION AND DISTRIBUTION 


41 


(Fig. 32), so far as the total is concerned, but with a much 
sharper line so far as railways are concerned. The cause of 
this difference between the two curves, that is, the money curve 
and the output curve, is the fact that in the development of our 
business we have probably carried to a greater extent than 
the majority of electric-service corporations the wholesaling 
of energy for transportation. 

Fig. 34 (next page) gives you an idea of the increase of the 



CALENDAR YEARS 

Fig. 33. Results in Chicago 

earnings from the sale of electricity per capita from the years 
1895 to 1915 in the city of Chicago. 

Low Price of Electric Light and Power. 

The income per kilowatt-hour sold is given in Fig. 35. The 
income from light shows a steady drop per unit sold from 
1898 to 1915, amounting to about 46 per cent in price per 
kilowatt-hour sold. The power income follows somewhat 
the same curve. It started at a lower price and necessarily 
ends at a lower price. The wholesaling of energy for trans- 

































































42 


POWER GENERATION AND DISTRIBUTION 



Fig. 34. Increase of Population Compared with Increase in Sales 
of Electricity (Chicago) 
























































































































































POWER GENERATION AND DISTRIBUTION 


43 


portation purposes runs along on a very steady line. In the 
first three years the price did not vary. As the business devel¬ 
oped the price dropped in 1906, and that price continues prac¬ 
tically up to the present time and is on a basis lower than it 
is possible for the local transportation companies of Chicago to 
produce their energy themselves. The price per kilowatt-hour 
in 1915 was 16 per cent lower than in 1908. This difference 
is not apparent in the curve on account of the scale used. 


Fig. 36 gives you an idea of the amount of electric light 



Fig. 36. Amount of Electric Light One Dollar Would Buy 
in Chicago 


one dollar would buy in the years from 1886 to 1915. This 
chart shows graphically the great reduction in the cost of elec¬ 
tric light to the average small user. The quantity that one 
dollar will purchase is now six times as large as it was ten 
years ago. 

A chart of the annual load factors of the Commonwealth 
Edison Company (and its predecessors) for the last sixteen 
years is presented in Fig. 37. You will notice that the street- 
railway load factor went up and then dropped. It was at its 

















































44 


POWER GENERATION AND DISTRIBUTION 


highest for a few years just before one of the large street 
railways shut down its obsolete stations, which it had operated 
as “peak plants” only. This shutting down had also the result 
of earning it a very low price for the energy it purchased. The 
tendency of the railway load factor is to run even. The tendency 
of the light-and-power load factor is to improve. For 1915 
the combined load factor was 42.5; the light and power 35.8, 
and the street-railway business by itself 41. The improvement 
in the two combined is owing to the diversity. 

A diagram showing the reduction in lighting rates, the 
average lamps per customer and the number of customers is 



given in Fig. 38. The chart shows that as the rates for elec¬ 
tricity have been reduced the number of customers has in¬ 
creased enormously and the average size of the customer’s in¬ 
stallation has grown smaller. Electric light, instead of being 
a luxury as it formerly was, is now the cheapest illuminant. 

What Becomes of the Dollar of Income. 

Fig. 39 (page 46) is a very instructive chart showing what 
becomes of the dollar of income; and I venture to say that the 










































POWER GENERATION AND DISTRIBUTION 


45 


figures given here are relatively about the same whether it is 
in a large city like Chicago or in a smaller city like New 
Haven. Whenever I appear before a technical body in which 
There are a number of students of our universities, it is my 



Fig. 38. Retail Lighting Rates and Number of Customers, 

Chicago 


habit to show then: this chart, as I think it gives them a great 
deal of information which should be very illuminating to them. 

While it is not my function to discuss political questions, 
one of the serious questions of the day is the view that a great 
many young men going out into life have regarding the large 
enterprises of the state. Their view is one of prejudice. 








































































































POWER GENERATION AND DISTRIBUTION 


4<; 

Their opinions are very largely based upon the statements of 
able writers who have great facility of expression but who are 
untrammelled by responsibility of position, and in a great many 
cases untrammelled by knowledge of the subject that they are 
dealing with. 

()ne of my main reasons in accepting im itations to appear 
on such occasions as this is to try and produce some impression 



upon the younger men in relation to matters of this character. 
I f you were to come out to Chicago, the long-haired talker, the 
long-haired reformer, would talk about the earnings derived 
from our investment in a way most unfriendly to the pub¬ 
lic-service corporation; he would tell you that the rate we 
charge is ten cents, whereas this is our maximum rate. But I 










POWER GENERATION AND DISTRIBUTION 


47 


want to tell you that of every dollar we receive seven per 
cent of it goes back into either the municipal or the state 
treasury, and that as a matter of fact when our patrons are 
paying us a dollar they are indirectly being taxed seven per 
cent of that dollar in the form of what amounts to double 
taxation. 


Elements of Cost. 

If that long-haired reformer happens to be an advocate of 
municipal ownership, he will not tell you that no allowance is 
made by the municipal plant in this city or that city to com¬ 
pensate for the sum paid by the public corporation in the shape 
of taxes and compensation. Now take the size of these vari¬ 
ous sections (see Fig. 39). You will see here that that part 
of the capital which is obtained on a low-interest basis because 
it has a prior lien does not get very much more out of the busi¬ 
ness than the amount that has to be paid for the privilege of 
doing business; and bear in mind that the corporation does 
not pay for that privilege. Our customers pay for that privi¬ 
lege, as it is figured in the cost of energy. 

We are a regulated monopoly, a partial monopoly as a rule, 
but we are regulated, as our rate for energy is settled by a 
state commission, based upon our cost and a reasonable return 
on our property, and to that is added the taxes and municipal 
compensation, so that the people who pay that are not our 
2,500 stockholders, but our 250,000 customers. 

The people who take the greater risk and who put their 
money into stock, into the junior securities of the company, 
only get a little over twice as much on the operation as 
the community gets for the right to do business. Those irre¬ 
sponsible heads of organizations who like all the privileges but 
none of the responsibilities of government always want to take 
care of labor; but out in Chicago all that they allow us to 
pay labor is about twice as much as our customers pay the 
community for our right to do business with them. 

Fuel is supposed to be a very important portion in our cost. 
We consume thousands of tons of coal per day, and yet our 


48 


POWER GENERATION AND DISTRIBUTION 


total coal cost is less than double what our customers pay to the 
community for giving us the privilege to do business. And so 
on all the way round. 

Steam-Turbine Efficiency 

An interesting chart in relation to the steam-economy tests 
of various turbines is shown in Fig. 40. These curves show that 






















T 















STEAM ECONOMY TESTS OF 



<s 

S N 











STEAM TURBINES 







5001 

1 K. 

1. - 

1*01 





ALL VALUES BASED ON — 

STEAM PRESSURE 200 LBS. 

SUPERHEAT 200 *F 

























CONDENSER PRESSURE 1 IN. ABSOLUTE 




5Q9 

L*. 

f. - 












— 

i 




















j 

p 



— 

— 












12,01 

50 

E.W.- 

-190 

7 

— 































*5.000 ! 














-n 

rn 

^4 






























































































































12.000 1S.000 

LOAD IN KILOWATTS 

Fig. 40. Steam-Turbine Efficiency 


in 1903 the design of the steam turbines then available was 
such that the water rate was 22.5 pounds per kilowatt-hour. 
The machines of that period had two wheels with four rows 
of buckets to each wheel. It was, therefore, necessary to 
expand the steam considerably in the first nozzles to get suffi¬ 
cient velocity so that the energy generated could be absorbed 
by the two wheels. This high velocity meant, of course, con¬ 
siderable friction loss. 

In 1905 improvements in design reduced the water rate to 
15 pounds per kilowatt-hour under the most economical load 
on the machine. In 1907 five wheels were used, there being 
two rows of buckets for each wheel. Consequently, the lower 






































































POWER GENERATION AND DISTRIBUTION 


40 


velocities from the nozzles reduced the friction losses, giving 
a water rate of about 12.3 pounds per kilowatt-hour. Still 
further improvements were made in the 1914 design. The 
number of wheels was increased to ten. With more correct 
bucket shapes, and with one row of buckets for each wheel, 
the water rate was still further reduced. The curve for this 
machine is not shown, as it coincides very nearly with the 
curve labeled “25,000 K. W.” in Fig. 40. This curve is for 
a turbine of the reaction type. The preceding remarks apply 
to machines of the impulse type. As its name implies, the 
reaction turbine employs the principle of reaction, its evol¬ 
ution being very similar to that of the impulse machine. 

Those last curves are, I think, indicative of the progress 
which has been made in the efficiency of the steam turbine 
during a period of over eleven years. 

Conservation of Fuel. 


Fig. 41 shows the other side of that same subject, that is, 
the conservation of fuel. Here is shown the drop in the 
pounds of coal per kilowatt-hour produced, starting at nearly 






























































POWER GENERATION AND DISTRIBUTION 


r»o 



1903 1905 1907 1909 1911 1913 1915 

YEARS 

Fig. 42. Cost and Income Figures in Chicago 



TEARS 

Eig. 43. Cost. Income and Investment Figures 


CENTS PER DOLLAR OF INVESTMENT 
































































































POWER GENERATION AND DISTRIBUTION 


r>i 


seven pounds per kilowatt-hour and going- down to 2.70 
pounds. Another curve shows the kilowatt-hours generated, 
and a third the tons of coal burned. 

The diagram is indicative of what we have been able to 
do in the direction of conservation of coal. That results 
partly from the improvements in the prime movers, partly by 
the shutting down of small uneconomical stations, and the 
massing of production and distribution over very much wider 
areas. 

1 think that while a great many of our well-intentioned 
friends have been shouting about the conservation of natural 
resources, the steam-turbine inventors and the designing 
engineers of the great power companies using steam as a 
prime source of power have probably done more to conserve 
the natural resources of this country, in so far as fuel is con¬ 
cerned, than has been done by all the agitation that has taken 
place upon the general subject of conservation. 

It is interesting to note that the saving in Chicago per unit 
for the fourteen years from 1900 to 1915 was equivalent to a 
saving for the year 1915 of 2,472,400 tons, or 58,000 carloads of 
coal per year, or fourteen loads of forty cars each per day. 

. Financial Data and Statistics. 

Fig. 42 gives you some financial figures—the total cost per 
dollar of income, the income per dollar of investment, the total 
operating cost per dollar of income, and the net earnings per 
dollar of investment. 

Some more financial information in another way is pre¬ 
sented in Fig. 43. This gives cost and income per kilowatt- 
hour sold. To the cost is added the necessary allowance for 
interest and depreciation. You will see how closely the cost 
and the income follow each other during a period of from 1902 
to 1915. The kilowatt-hours sold per dollar of investment are 
also shown in Fig 43. When we were doing but a small whole¬ 
sale business we used to sell only two kilowatt-hours per dollar 
invested. Now we sell thirteen kilowatt-hours per dollar 
invested. 


POWER GENERATION AND DISTRIBUTION 


A very interesting diagram showing the diversity of large 
light-and-power customers is that of Fig. 44. It has always 
been assumed until this particular investigation was made that 



Fig. 44 Diversity in the Demands of Large Consumers 


the maximum demand of manufacturers and large users came 
at about the same time, but Fig. 44 shows this is not the case. 

Possibilities of the Future. 

Now as to the possibilities of this class of business. You 
will have to excuse me for referring so much to Chicago, but 
I have more definite information regarding the city of Chi¬ 
cago than I have in regard to any other place. The light-and- 
power business of the Commonwealth Edison Company is ap¬ 
proximately 338,000 kilowatts ; that of isolated plants is 264,500 
kilowatts, and that of the steam railroads 125,700 kilowatts, 
making a total of 728,200 kilowatts. 

Our estimate is that at the present time we are doing about 
46 per cent of the total possible business in the city of Chicago, 
and that if we had the entire possible business, instead of run¬ 
ning at a load factor of 40 or 41 per cent, we would probably 

































POWER GENERATION AND DISTRIBUTION 


53 


have a load factor on the entire system of upwards of 50 to 
60 per cent. 

What does that mean ? Broadly speaking, it means that the 
cost of carrying the necessary investment for a city of two 
millions and a half of people, that is, the interest cost and 
the depreciation cost of carrying the entire investment, if 
all the energy is produced under one organization, would be 
reduced approximately 33% per cent. That would indicate 
that at the present time where any form of energy is required 
—I do not care whether by steam or electricity or how it may 
be obtained—it is an economic waste for the individual spend¬ 
ing the money to try to produce that energy in a small way, 
and that the true function of the large electric-light-and- 
power companies of this country is to produce all the energy 
that is required in the community. In these days when 
so many of our operations between the cradle and the grave are 
being regulated I am somewhat inclined to think that the day 
will come when one of the regulating bodies will step in, 
insist on all energy being produced from central generating 
plants and tell the people who are guilty of economic waste 
that they must stop. Such regulating body will say that the 
country cannot afford to have them throwing away money, 
which indirectly must be sapping the country’s wealth, as if 
equipment is employed unnecessarily, if fuel is wastefully 
employed, if labor is wastefully employed, all those things must 
be harmful to the general wealth of the state. 

Broad Aspects of tiie Question. 

I firmly believe that the doctrine that it has been my 
privilege to preach for a good many years, and which I am 
glad to say is becoming more popular—that is to say, the 
massing of production, the massing of distribution, the selling 
of energy for all kinds of purposes on a very large scale 
from one system—I firmly believe that in advocating that 
course, while I am advocating a course that is very advan¬ 
tageous to the class of property that it is my privilege to have 
charge of, at the same time I am advocating a course that is 


54 


POWER GENERATION AND DISTRIBUTION 


very advantageous to,the whole community and to the whole 
state. 

To give you some idea of how these figures mount up I 
have had worked up the data derived from Census statistics 
on the same basis on which we have worked it out for the 
city of Chicago, and applied it to the whole country. Suppos¬ 
ing we take all the settled areas of the United States wherever 
there is great density of population, practically everywhere 
this side of the Mississippi and practically everywhere the 
other side of the Rocky Mountains (all you have to leave 
out is the desert country and the purely agricultural country), 
and let us assume that all the work is done electrically. Let 
us assume that every part of the country where the density of 
the population justifies it, whether it is in a community or 
whether it is state-wide, or whether it occupies a larger area 
and goes beyond the confines of a state—let us assume the 
electricity-supply business is all put under a series of central 
organizations, and what do we find? 

Great Savings That Could be Effected. 

We find that it takes about 68,000,000 to 70,000,000 horse¬ 
power of non-coincident demand; that the coincident load 
would be about 47,000,000 horse-power, and that the diversity 
would be upwards of 20,000,000 horse-power. If you will cap¬ 
italize the labor that would be saved; if you will figure the 
investment cost of the 20,000,000 of horse-power that would 
be saved; if you will figure out the value of the fuel that would 
not be used—the savings are staggering; and the possibilities 
that this business ofifers are almost beyond the dreams of the 
most enthusiastic figurer. 

I happened to learn only a few weeks ago of a case in a 
city not very different from any other city and not a very 
large city, in a territory where the population is not so dense 
as it is in this Connecticut country, and where the amount of 
energy used is not as great. In the city itself the electrical 
interests, both for light and power and for transportation, are 
in one organization. Outside the city, in the surrounding 


POWER GENERATION AND DISTRIBUTION 


territory, most of the light and power and transportation 
interests are in another organization. In the city the maximum 
load comes in the afternoon. In the surrounding territory 
the maximum load comes in the morning. In the city they, 
so to speak, allow the water to flow over the dam all day long 
except in the afternoon, and outside the city they allow it 
to flow over the dam all day long except in the morning. 

If you will capitalize the saving in operation in just that 
one district, with a population relatively small, and add the 
saving in investment that would take place by combining the 
generation of energy in that small piece of territory of about 
100 square miles, the saving will be between six and seven 
million dollars. 

Where teie Real Danger Lies. 

Yet some persons would tell us that if that is allowed to 
be done it will produce a combination that may be dangerous 
to the state. It is not dangerous to the state to let the money 
go to waste, to waste its resources and its capital; but it is 
said to be dangerous to the state to allow an organization to 
double its size, even though that organization is regulated by a 
commission of the state appointed or approved by the state 
Legislature. I think that is the kind of danger to the state that 
I shall have to spend my days in advocating as long as I live; 
I think that it is to the highest possible advantage to the state, 
/that it is a real contribution to the better management of the 
country’s affairs. In closing I cannot do better than to tell the 
young men here who are expecting to make the class of busi¬ 
ness with which I am proud to be associated their life’s 
work that I do not know of any business in this country in 
which there are greater possibilities, greater opportunities, for 
men not only to serve themselves but to serve their fellows. 
I know of no walk in life, public or private, in the industrial 
world, in which there are greater possibilities of national 
advantage and community advantage than in the business that 
I have tried to tell you something about this evening. 




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